German ‘Siege Mentality’ Blamed for Failures in Wirecard Scandal
German ‘Siege Mentality’ Blamed for Failures in Wirecard Scandal
(Bloomberg) -- German authorities systematically failed in uncovering the scandal around failed payments firm Wirecard AG even though there were multiple indications of wrongdoing early on, German opposition lawmakers said after presenting their findings from an inquiry.
Wirecard collapsed in 2020 after executives admitted that 1.9 billion euros ($2.3 billion) it had reported as assets probably never existed. The opposition parties presented a 675-page long final report on their findings in the Wirecard investigation committee which will be discussed in parliament June 25.
The parliamentary inquiry, which has heard testimony from around 100 witnesses, has been seeking to determine how the unprecedented fraud by a company listed on the benchmark DAX index could go undetected for years, and why authorities failed to intervene. In an election year, opposition parties have sought to highlight the Finance Ministry’s failures in the Wirecard affair as the body is run by center-left candidate for chancellor, Olaf Scholz.
Lawmakers blamed “collective supervisory failures, German siege mentality with regard to foreigners, political cronyism and the longing for a digital national champion” for allowing a string of government agencies including the finance ministry and banking regulator BaFin to look the other way regarding malfeasance at the firm.
“The German prosecutor and Bafin not only failed to uncover the fraud, they actively intervened on the wrong side in favor of Wirecard,” Florian Toncar, lead lawmaker of the liberal FDP party said, referring to efforts to prosecute journalists who covered allegations against the company.
In 2019 German lender Commerzbank AG presented “on a silver plate” evidence of more than 300 incidents of possible criminal money laundering activity which were not followed up, Toncar said. The lawmaker also said he sees a need to reform the system of regional prosecution offices which are not equipped to handle criminals acting on a global scale.
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